QUESTION: What’s the best ASX stock to harness oil’s rise? James Cooper is making a new play on the resurgent energy markets. Drawing on battle-knowledge from the last boom, these roughnecks are once again cornering key assets…and making canny deals…at the exact right time. In fact, while gas was their golden ticket last time, this time it’s OIL. Potentially 1 billion barrels of untapped oil, to be precise. And with new discoveries far scarcer today than they were in the 2000s…those billion barrels could be even more valuable. The stock went from 15 cents to above $9 in the last boom. Now it’s trading back below $2. And Bloomberg has pegged them as one of the first Australian energy sector targets in a new wave of takeovers. Who are they? Find out here. |
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This Classic Technical Signal Points to Correction Ahead |
Saturday, 1 June 2024 | By Murray Dawes | Editor, Retirement Trader and Fat Tail Microcaps |
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[2 min read] Dear Reader, In today’s Closing Bell video I will teach you about a classic technical signal known as bearish divergence that has a great record of tipping trades with solid risk/reward and a high strike rate. But it has to be remembered that a great trading signal will probably get it right 50% of the time or perhaps a bit more for the best ones. It is the amount you can make versus the amount that you risk that can turn a flip of the coin into a money spinner. And the bearish divergence signal can be good because it gets you into a trade very early as markets start to turn down. What that means is that you don’t need to risk much to find out if you’re right. If the trade does go your way the upside can be exciting because you have entered the position early in the move and if a sell-off does eventuate you can potentially reap the benefits quickly. Advertisement: The last time this boom flared...this stock went off like a coiled spring... From 15 cents to $9 in the LAST oil boom…now back to under $2. As the oil and gas cycle turns up once again…we believe this crew could be gearing up for an encore performance… While gas was their golden ticket last time, this time it’s OIL. Potentially 1 billion barrels of untapped oil, to be precise. Bloomberg has pegged them as one of the first Australian energy sector targets in a new wave of takeovers. To find out who they are, go here |
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But at the end of the day you have to be prepared to trade the signal over and over again so that the odds of success and risk/reward play out. The bearish divergence is on the weekly chart in the S&P 500, which hints that in the short-term odds are fairly high that we see more downside. That doesn’t change the long-term bullish picture in the S&P 500 at all and I need to make that point clear. The S&P 500 has to drop over 10% from where it is now to threaten the currently bullish conditions, and this correction I’m predicting, could be short lived and provide a good buying opportunity in due course. Of course, there are never any guarantees here, investing in any market carries risk. Whether or not this signal ends up being correct is beyond my control and I will leave it up to the trading gods to decide. But if you wanted to understand how to hunt for bearish divergence trades and where you should place stop losses to manage your risk check out today’s Closing Bell video above. Regards, Murray Dawes, Editor, Retirement Trader and Fat Tail Microcaps Murray Dawes is our resident expert trader and portfolio manager. He is a former Sydney Futures Exchange floor trader who went on to design custom trading systems and strategies for ultra-wealthy clients (including one of Australia’s richest families). Today, his mission is to help ordinary Aussie investors make profitable investments, while expertly managing risk. He uses his proprietary system for his more conversative and longer-term-focused service Retirement Trader…and then applies the same system to the ultra-speculative end of the Australian market in Fat Tail Microcaps (this service is strictly limited and via invitation only). All advice is general advice and has not taken into account your personal circumstances. Please seek independent financial advice regarding your own situation, or if in doubt about the suitability of an investment. |
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